Oheto Company

E9-1 | | | |

(Lower of Cost or Market) The inventory of Oheto Company on December 31, 2011, consists of the following items. | Part No. | Quantity | Cost per Unit | Cost to
Replace per Unit | | 110 | | 600 | | $95 | | $100 | | | 111 | | 1,000 | | 60 | | 52 | | | 112 | | 500 | | 80 | | 76 | | | 113 | | 200 | | 170 | | 180 | | | 120 | | 400 | | 205 | | 208 | | | a121 | | 1,600 | | 16 | | 14 | | | 122 | | 300 | | 240 | | 235 | | | a Part No. 121 is obsolete and has a realizable value of $0.50 each as a scrap. | (a) | Determine the inventory as of December 31, 2011, by the lower of cost or market method, applying this method directly to each item. |
(a) | The City of Pebble Beach gives the company 5 acres of land as a plant site. The market value of this land is determined to be $81,000. | (b) | 14,000 shares of common stock with a par value of $50 per share are issued in exchange for land and buildings. The property has been appraised at a fair market value of $810,000, of which $180,000 has been allocated to land and $630,000 to buildings. The stock of Impala Company is not listed on any exchange, but a block of 100 shares was sold by a stockholder 12 months ago at $65 per share, and a block of 200 shares was sold by another stockholder 18 months ago at $58 per share. | (c) | No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed. | | Materials used | $12,500 | | Factory supplies used | 900 | | Direct labor incurred | 16,000 | | Additional overhead (over regular) caused by construction |